A Governmental Entity Is Funding a Capital Project with the Issuance

question 21

Multiple Choice

A governmental entity is funding a capital project with the issuance of general obligation bonds, as well as a federal grant. The grant would be reported on the operating statement as

• A) An other financing source.
• B) A revenue.
• C) A nonoperating revenue.
• D) An other financing use.

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Definitions:

Section 179 Expense

A section of the IRS tax code allowing businesses to deduct the full purchase price of qualifying equipment and/or software within a tax year.

Separately Stated

Items on a tax return or financial statement that are listed individually to ensure proper treatment under tax laws or accounting rules.

Ordinary Income

Income earned from providing services or the sale of goods, as opposed to capital gains or investment income, taxed at standard rates.

Section 179 Expense

A tax deduction that allows businesses to deduct the full purchase price of qualifying equipment and/or software within a tax year.